Bernstein unveils top European medtech stock picks to buy for H2

European medtech has faced challenges in 2026, with only Demant and Sonova outperforming the Stoxx 600 index. However, Bernstein's investment firm is suggesting two promising stocks for the second half of the year: Sonova as a short-term pick and Alcon as a long-term investment. Both companies are rated "outperform" with price targets of CHF 275 and CHF 76.15, respectively.

Sonova, the world's leading brand in the $7.7 billion hearing aid wholesale market, boasts a 25% market share. The company is expected to thrive with a 10.1% organic growth in wholesale sales during H1 2026/27, outperforming consensus expectations of 8%. This growth is attributed to the successful launch of the EON Sphere, increased share in Costco stores, and continued sales of the Virto R hearing aid.

Additionally, the company anticipates a boost in Cochlear Implant business and accelerating M&A contributions in retail, especially as competitors Demant and Amplifon face financial constraints.

Alcon, a dominant player in ophthalmology, holds top or second positions in most of its sub-markets. According to Bernstein, the company's intraocular lens and consumables businesses have become undervalued due to negative investor sentiment, which is expected to be temporary. The firm highlights Alcon's successful defense of market share with the PanOptix Pro launch and expects similar success with the Vivity Pro in 2027.

Despite the pressure from J&J's PureSee launch in the U.S. market, Alcon's growth is projected to accelerate to 4% in 2027. With a constant-currency revenue growth estimate of 38-112 basis points above consensus for 2026E-2028E, Bernstein considers Alcon an attractive multi-year compounding business at a relatively low price of roughly 17x NTM P/E.